Business & Investment

U.S. economic growth outlook dim and less stimulating with Covid-19 wave

The US economy slowed again in the first quarter of 2021 and even negative growth due to a surge in Covid-19 infections, new restrictions, and small, slow stimulus measures, according to investment research institutes. May be achieved.

JP Morgan said in a client note on Friday that the US economy would shrink 1% in the first quarter of next year as the national pandemic deteriorated after growth of 2.8% in the fourth quarter of this year.

Investment banks previously predicted that the U.S. economy would grow at an annual rate of 2% to 3% from the fourth quarter of 2020 to the first quarter of 2021, and the stability of the recovery will depend on additional fiscal stimulus measures, according to the Xinhua News Agency. Was.

Daily cases in the United States have recently hit record highs, and many local governments have re-imposed curfew or school closures to check for pandemics.

JP Morgan became the first major research institute to forecast negative growth in the first quarter of 2021, but the downside risks facing the economy were reflected in other research institutes as well.

Without further extension, the expiration of the federal unemployment insurance program at the end of December could drop by up to 1.5 percentage points to economic growth in the first quarter of 2021, according to a Bank of America Global Research study note.

The end of other pandemic support programs will bring further headwinds early next year without additional stimulus, Bank of America Global Research warned.

On Thursday, the Treasury decided not to use funds from coronavirus aid, bailout, and economic security laws to expand five federal-operated facilities after the facility expired on 31 December.

According to a recent outlook report issued by UBS, the United States could enact another $ 500 billion to $ 1 trillion coronavirus aid package.

According to the Bank of America Global Research, Congress could pass another $ 500 billion to $ 1 trillion stimulus in the first quarter of 2021, offsetting resistance from program expiration and the second quarter of 2021. Supports the growth of.

However, the scale of the additional fiscal stimulus seems to be much smaller than the approximately $ 2 trillion that was about to be announced before the November 3 presidential election.

JP Morgan also expects the US economy to grow 4.5% in the second quarter of 2021 and 6.5% in the third quarter.

U.S. real GDP increased at a seasonally adjusted annual rate of 33.1% in the third quarter after recording a sharp drop of 31.4% in the second quarter during the pandemic blockade, according to data released by the Bureau of Economic Analysis. Did.

The story was taken from a news agency



U.S. economic growth outlook dim and less stimulating with Covid-19 wave

https://www.zeebiz.com/world/news-us-economic-growth-outlook-dims-on-pandemic-waves-weaker-stimulus-141289 U.S. economic growth outlook dim and less stimulating with Covid-19 wave

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